The United Auto Workers suffered their most crushing defeat in a generation Friday night when workers at a Volkswagen plant in Tennessee voted against unionizing their shop. The vote was seen as a critical test of the UAW’s ability to organize in the South, which is fast becoming America’s new manufacturing center of gravity.

Employees rejected the UAW 712 to 626, the culmination of a months-long battle that pit the union against local politicians, including Governor Bill Haslam and the state’s Republican legislature, who feared that unionization threatened Tennessee’s ability to compete for business against rival states.

But with the Volkswagen plant, based in Chattanooga, the union saw an opening in the traditional anti-union bastion of the south. VW works hand-in-hand with labor in plants worldwide through “works councils” in which management and workers both participate in setting policy for running the factories. VW was hoping to create a similar arrangement in Tennessee, and, while not backing the unionization drive, did not stand in its way, either. The company had urged “third parties” not to interfere with the vote.

Nonetheless, workers seemed to feel they didn’t need the UAW, and many told reporters present at the vote that they blamed the collapse of Detroit’s automakers on the predominance of the union there.

It was a particularly stinging defeat for UAW president Bob King, who has been focused on the South as they lynchpin of future union growth thanks to a boom in auto manufacturing there. Since the late 1970s, UAW membership has been more than cut in half to under 400,000 members as U.S. automakers reeled.

Meanwhile, a host of foreign automakers from VW to Daimler to Toyota and Hyundai have set up shop in the largely anti-union South, with brand new facilities, some of which are among the most advanced factories in the world, leading a to renaissance in the U.S. auto industry—and capturing 30% of all U.S. auto sales. Competitive labor costs, access to capital and a host of incentives from Southern states eager to attract manufacturing have fueled the boom.

To keep the union relevant long-term, the UAW needs to make inroads into these plants, and the VW vote was critical to that effort. “We’re obviously deeply disappointed,” King told reporters at a newsconference after the vote.

Local officials, who fought the vote, had a different take, obviously. “Needless to say, I am thrilled for the employees at Volkswagen and for our community and its future,” said U.S. Senator Bob Corker, the former mayor of Chattanooga who helped attract the $1 billion plant to his town the first place.

Source: Forbes Auto

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